Niagara Gazette

May 19, 2013

EDITORIAL: Plan B needed on casino funds

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Niagara Gazette

Niagara Gazette — The city of Niagara Falls has been facing significant problems for many years. 

The usual lingering concerns — crime, poverty and blight — continue to exist.

At the moment, however, there’s a much more pressing problem facing the municipality. 

It comes down to a single word: Money.

As has been widely reported, the city’s financial situation has been in progressive decline since the Seneca Nation of Indians stopped making casino revenue payments to the state of New York.

For months now, city officials have been keeping close tabs on an ongoing arbitration process.

Mayor Paul Dyster continues to hold out hope that the arbitrator’s ruling will be successfully resolved by mid-year, allowing the city to collect the more than $60 million it is now owed. 

With all due respect to the mayor, hope is not a strategy for running a household, much less a municipal government.

To be fair, it is not helpful, nor wise, for city lawmakers to exploit the city’s desperate financial situation by suggesting, in public, time and again and at times wrongly, that the city is headed for bankruptcy, destitution and the point of no return. 

It’s high time both sides come together and act in the best interests of their constituents, namely the residents of Niagara Falls. 

It is long past due for our city leaders, Dyster included, to outline in greater detail what it is the city will do should the arbitration process end in a less-than-favorable ruling. 

The city is at a critical point and continues to hear mixed signals out of Albany. 

While Dyster says he’s being assured by Albany officials that the state’s position in the casino cash debate remains strong, Gov. Andrew Cuomo also recently threatened to move forward with plans for a state-run casino in Western New York, and possibly Niagara Falls, if the Seneca Nation doesn’t return to the bargaining table soon. 

Taxpayers in Niagara Falls deserve to know they’ll be protected either way. After all, they are the ones — city employees included — who will be on the hook should the worst-case scenario unfold. 

In recent years, the city — through sound fiscal management and good stewardship — has been steadily improving its image as a worthwhile investment.

In a matter of months, without backing from casino revenue, it has fallen back into the financial abyss, a stunning and depressing turnaround that has included not one, but two bond rating downgrades and a third ratings company assigning the city’s bond to “watch” status. 

In the latest blow to the city’s standing, Moody’s Investors Service downgraded the rating on the city’s $65 million in outstanding general obligation debt to Baa3 from Baa1 while assigning a “negative” outlook. 

In announcing its decision, the ratings firm took note of the city’s “highly stressed liquidity position” amid the casino revenue delay. It also incorporated the same old list of familiar issues — the weak economy, high unemployment, depressed income levels and elevated debt position. 

“The negative outlook reflects the city’s projected depletion of cash as early as November 2013 if the money due from the Seneca Nation is not remitted or an alternate liquidity source is not identified,” Moody’s concluded.

We certainly hope the arbitrator’s ruling results in the city of Niagara Falls getting all of the money it is owed.

We also believe the city, and its partners at the state, should have a plan in place for the alternative, just in case. 

Failing to do so would just compound one of the city’s longest-standing and most distressing concerns: Failed leadership lacking the vision necessary to prepare for the future, no matter how uncertain.